4 ms·

To further this, a lot of people (see Sam Altman, for example[1]) are saying the federal government should give depositors all of their money bank, and don't se

by bnralt 4y ago

To further this, a lot of people (see Sam Altman, for example[1]) are saying the federal government should give depositors all of their money bank, and don't seem to care at all about what this would mean in the long run. Is the FDIC now insuring all deposits in the U.S. for an unlimited amount? What would the implications of that be? Maybe there should be changes made to help protect depositors more, but instead of a collected and rational conversation about how we'll treat deposits going forward we're getting glib "just give these people there money back, they don't deserve this" responses. Of course these things are tragedies, but the degree to which the federal government assists people in these situations is a complex discussion, and we have to come up with a consistent approach. People are asking about salty response, but this kind of cavalier attitude toward the financial system from supposedly serious thought leaders is a bit alarming. [1] https://twitter.com/sama/status/1634958179657449475 https://twitter.com/sama/status/1634958179657449475

geodel 4y ago
Was it Muhammad Ali who said "Everyone has a plan until they get punched in the mouth"? Seems to me all these "disruptors", "thought leaders", "visionaries" are disrupted and their plan to deal with this is nowhere to be seen.
- FireBy2024 4y ago
  Mike Tyson
- dctoedt 4y ago
  > Was it Muhammad Ali who said "Everyone has a plan until they get punched in the mouth"? It was Mike Tyson - https://www.sun-sentinel.com/sports/fl-xpm-2012-11-09-sfl-mike-tyson-explains-one-of-his-most-famous-quotes-20121109-story.html https://www.sun-sentinel.com/sports/fl-xpm-2012-11-09-sfl-mi...
- TheGrassyKnoll 4y ago
  Mike Tyson, the epitome of sound fiscal management. ($300 million lifetime earnings, had to declare bankruptcy)
  - Apocryphon 4y ago
    Sounds like he’s in the perfect position to know the fruits of such errors.
- deleted 4y ago
  [deleted]
bushbaba 4y ago
The 250k limit should be inflation adjusted. It’s not been raised since 2008. If inflation adjusted the FDIC insurance would be closer to 350k
- jjav 4y ago
  > The 250k limit should be inflation adjusted. It’s not been raised since 2008. If inflation adjusted the FDIC insurance would be closer to 350k That 100k difference wouldn't make any difference here though, since the problem is for businesses (startups mostly) who had accounts there. The 250K insurance limit seems quite reasonable for individual personal accounts per bank. But applying the same limit to a whole company which may well have more than 250K in payroll per month... well there's a problem.
theLiminator 4y ago
Maybe the fed should open a bank for deposits that's guaranteed but provides either tbill interest or zero interest. It's pretty ridiculous for people to need to judge whether their bank is fiscally sound.
- deathhand 4y ago
  Are your computers and networks secure? If you operate in 1% space of wealth there are and should be risks. Making everything the lowest common denominator literally leaves us with Camacho for president.
  - dlubarov 4y ago
    Why should there be risks? If someone just wants to park some cash without it possibly disappearing, that seems like a solvable problem. E.g. as the parent said, central banks could simply offer accounts to anybody.
- thanksgiving 4y ago
  > Maybe the fed should open a bank for deposits that's guaranteed but provides either tbill interest or zero interest. > It's pretty ridiculous for people to need to judge whether their bank is fiscally sound. This is a great idea. We should look into this more. iirc three researchers asked this same question back in 2018. > A potential policy recommendation was posed in 2018 by three researchers, two of whom worked in the Treasury Department. Under their proposal, the Federal Reserve would offer the option to all individuals and businesses in the United States to open a bank account, termed a “Fed Account,” with the Federal Reserve itself, providing an alternative to private banks or credit unions. Such an option could have significant effects on a wide array of monetary and economic issues. https://econreview.berkeley.edu/fed-accounts-and-the-right-to-save/ https://econreview.berkeley.edu/fed-accounts-and-the-right-t...
mycall 4y ago
If I had $1M stored in SVB, I would have 4 accounts with $250k each. Why is this so hard for people to understand?
- blep_ 4y ago
  The limit is per depositor * bank, not per account.
  - ww520 4y ago
    You’ll just be the depositor four times, once per account. It’s per account at the end.
    - mlyle 4y ago
      No... if the same depositor + ownership structure owns 4 accounts, the total insurance is $250,000, not $250,000 x 4.
  - sokoloff 4y ago
    Per person, per bank, per account ownership category. https://www.fdic.gov/resources/deposit-insurance/brochures/insured-deposits/ https://www.fdic.gov/resources/deposit-insurance/brochures/i... If you had a single-owner account and a joint account, you would have $250K in insurance for each of those accounts.
FireBeyond 4y ago
Yeah, there was a lot of balls to Sam's post, "many of the relevant people in government don't understand the magnitude of this"? Like the FDIC? I think they understand plenty. That's very specifically why they don't communicate with the bank before they take it over, that's why as many people have seen and been impressed with, they come in with almost surgical precision and take things over and work (literally) around the clock, realizing every hour, day counts, and get this stuff sorted. No Sam, it was people like you who underplayed the magnitude of this, and are now panicking, and looking for a bailout, and are entirely unable to justify why of the several hundred or more banks FDIC has closed (though one of the larger ones), SVB should be special, beyond "well, it's MY money".

by bnralt 4y ago

geodel 4y ago

Was it Muhammad Ali who said "Everyone has a plan until they get punched in the mouth"? Seems to me all these "disruptors", "thought leaders", "visionaries" are disrupted and their plan to deal with this is nowhere to be seen.

FireBy2024 4y ago
Mike Tyson
dctoedt 4y ago
> Was it Muhammad Ali who said "Everyone has a plan until they get punched in the mouth"? It was Mike Tyson - https://www.sun-sentinel.com/sports/fl-xpm-2012-11-09-sfl-mike-tyson-explains-one-of-his-most-famous-quotes-20121109-story.html https://www.sun-sentinel.com/sports/fl-xpm-2012-11-09-sfl-mi...
TheGrassyKnoll 4y ago
Mike Tyson, the epitome of sound fiscal management. ($300 million lifetime earnings, had to declare bankruptcy)
- Apocryphon 4y ago
  Sounds like he’s in the perfect position to know the fruits of such errors.
deleted 4y ago
[deleted]

bushbaba 4y ago

The 250k limit should be inflation adjusted. It’s not been raised since 2008. If inflation adjusted the FDIC insurance would be closer to 350k

jjav 4y ago
> The 250k limit should be inflation adjusted. It’s not been raised since 2008. If inflation adjusted the FDIC insurance would be closer to 350k That 100k difference wouldn't make any difference here though, since the problem is for businesses (startups mostly) who had accounts there. The 250K insurance limit seems quite reasonable for individual personal accounts per bank. But applying the same limit to a whole company which may well have more than 250K in payroll per month... well there's a problem.

theLiminator 4y ago

Maybe the fed should open a bank for deposits that's guaranteed but provides either tbill interest or zero interest. It's pretty ridiculous for people to need to judge whether their bank is fiscally sound.

deathhand 4y ago
Are your computers and networks secure? If you operate in 1% space of wealth there are and should be risks. Making everything the lowest common denominator literally leaves us with Camacho for president.
- dlubarov 4y ago
  Why should there be risks? If someone just wants to park some cash without it possibly disappearing, that seems like a solvable problem. E.g. as the parent said, central banks could simply offer accounts to anybody.
thanksgiving 4y ago
> Maybe the fed should open a bank for deposits that's guaranteed but provides either tbill interest or zero interest. > It's pretty ridiculous for people to need to judge whether their bank is fiscally sound. This is a great idea. We should look into this more. iirc three researchers asked this same question back in 2018. > A potential policy recommendation was posed in 2018 by three researchers, two of whom worked in the Treasury Department. Under their proposal, the Federal Reserve would offer the option to all individuals and businesses in the United States to open a bank account, termed a “Fed Account,” with the Federal Reserve itself, providing an alternative to private banks or credit unions. Such an option could have significant effects on a wide array of monetary and economic issues. https://econreview.berkeley.edu/fed-accounts-and-the-right-to-save/ https://econreview.berkeley.edu/fed-accounts-and-the-right-t...

mycall 4y ago

If I had $1M stored in SVB, I would have 4 accounts with $250k each. Why is this so hard for people to understand?

blep_ 4y ago
The limit is per depositor * bank, not per account.
- ww520 4y ago
  You’ll just be the depositor four times, once per account. It’s per account at the end.
  - mlyle 4y ago
    No... if the same depositor + ownership structure owns 4 accounts, the total insurance is $250,000, not $250,000 x 4.
- sokoloff 4y ago
  Per person, per bank, per account ownership category. https://www.fdic.gov/resources/deposit-insurance/brochures/insured-deposits/ https://www.fdic.gov/resources/deposit-insurance/brochures/i... If you had a single-owner account and a joint account, you would have $250K in insurance for each of those accounts.

FireBeyond 4y ago

Yeah, there was a lot of balls to Sam's post, "many of the relevant people in government don't understand the magnitude of this"? Like the FDIC? I think they understand plenty. That's very specifically why they don't communicate with the bank before they take it over, that's why as many people have seen and been impressed with, they come in with almost surgical precision and take things over and work (literally) around the clock, realizing every hour, day counts, and get this stuff sorted. No Sam, it was people like you who underplayed the magnitude of this, and are now panicking, and looking for a bailout, and are entirely unable to justify why of the several hundred or more banks FDIC has closed (though one of the larger ones), SVB should be special, beyond "well, it's MY money".